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The Friendly Guide to Saving and Investing

Putting money aside regularly will help you get the things you want in life, whether it’s a new car or a deposit for your first home.

But before you get started, there are a few things to think about that can help you to achieve your savings goals and find the right kind of saving or investing option to suit you.

What are you saving for and when do you want your money?

Choosing a goal is up to you - but getting into a regular saving and investment habit will help you achieve it quicker.

Whatever your goal, you should think about when you want your money and how easily you need to be able to access it. Thinking about whether it’s a short or long term goal can help you decide what the right way to save might be for you.

Shorter-term savings goals

Shorter-term savings goals are generally things you want to achieve soon or in the next 5 years.

Things like the annual holiday, saving up for Christmas or birthdays, a new car, or redecorating the house.

Longer-term savings goals

Longer-term generally means goals that are likely to be 5 or more years off.

For example, saving for children’s university fees, a deposit for a new home, for your retirement, or just being prepared for whatever the future may bring.

How much can you afford to put away?

Before you do anything, it’s vital to work out how much you can afford to save or invest.

Think about your monthly outgoings

Make a list of your monthly expenditure, including every outgoing like:
 

• Rent or mortgage
• Car payments
• Petrol
• Food
• Broadband
• Utility bills
• Gym membership
• Credit cards

 

Add it up and take away the amount from your total monthly income. Hopefully you should have some cash left over - can you spare some to put aside for a rainy day? If the answer is ‘no’ then you could think about ways to cut your monthly outgoings.

Hints and tips for saving money

Here are a few ideas of how you could save a few pounds here and there:
 

• Switch energy, insurance or phone supplier to a cheaper tariff.

• Instead of a pricey sandwich and coffee for lunch, make your own.

• Buy own-brand labels instead of big names at the supermarket.

• Curb your online spending habits - especially late night clicking!

 

Look for a better deal on any credit cards - paying expensive interest rates on your credit card defeats the object of saving or investing. Shop around for deals which offer 0% balance transfers, then aim to pay off the balance as soon as possible.

Which option best suits your goals?

So you know how much you can afford to put away each month, and what you want to use it for, the next step is to choose your method of saving or investing.

There are four main options:

Learn more about ISAs

If you’re new to the world of tax-efficient saving and investing, it can feel like there’s a lot to think about. We’ve a few more guides that can help.

Learn all about ISA limits and the different kinds available, and what might be right for you.

If you’re investing for your child, a Junior ISA is tax efficient way of saving or investing for their future.

If you’re not sure about the differences, and what might suit your needs better, our guide could help.

Thinking about getting started with an Investment ISA?

We have a range of Investment ISAs to suit your needs.

Why choose Scottish Friendly?

  • Established 1862

    We've been helping customers to invest for over 150 years.

  • We're a mutual

    That means any profits are used to benefit our members - people like you.

  • You're protected

    Your money is protected by the Financial Services Compensations Scheme.